Kickstarting a conversation around increasing voting token supply and mitigating threats posed by governance attacks by delegating tokens from the DAO treasury to performing delegates.
Motivation
Out of the 200M circulating supply of SHU tokens, on average less than 40M tokens participate in DAO governance. Many top delegates with considerable voting power have less than 50% vote participation rate, and some even as low as 10% or 0%. A potential attacker must acquire just over 40M tokens, currently worth less than 1M, to raid 5M in stables in the treasury. This is a significant concern given that participation in DAO governance is slowly declining. On the other hand, several delegates with over 80% voting participation actively participate in discourse regularly.
Proactive delegates have significant voting power in healthy governance environments, they ensure that malicious votes are prevented, and quorum requirements are met. To mitigate the risk of attack and empower value-aligned delegates, we suggest delegating a small portion of the 500M SHU tokens sitting in the treasury to active, value-aligned delegates.
Specification:
Criteria for eligibility:
Must have voted on 60% (or more) of proposals (minus the proposals that were cancelled) over the last three months (as of the date when this proposal is passed on Snapshot).
Must have actively participated in proposal voting for more than three months and have a Delegate Platform on ShutterDAO Forum.
Application Criteria
Meets the above Requirements
Voting Power is less than 5 million SHU (as of the date when this proposal is passed on Snapshot).
Delegation Specification:
Following the example of UniswapDAO, which has used franchiser contracts for such activity, we suggest using this same contract to delegate tokens from the treasury.
We suggest delegating 100M SHU tokens from the treasury, split equally among all eligible delegates for a period of 1 year. This amount will ensure that a potential attacker cannot gather sufficient tokens from the open market to gain majority voting power in the DAO.
If this proposal is approved, DAOplomats will create an application thread, which will be live for two weeks. We will filter out delegates who do not meet the criteria and create a proposal to delegate 100M SHU equally to all eligible delegates.
As compensation for deploying the contracts and facilitating the process, we request 50,000 SHU tokens.
How many, or more specifically which, delegates would qualify for this?
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Also, a couple of questions about this:
The last two votes were 185% of quorum, which I believe was the highest ever. The one before that was 169%. Do you still see declining participation as a problem?
Lastly, if this proposal passes, would you be willing to accept USDGLO for the equivalent amount instead of SHU?
I generally support this however as @5pence pointed out, the participation since we moved to a regular voting pattern has improved. Maybe delegating from the treasury is not required yet and we should see how the subsequent couple of months go.
The downside of allocating tokens from the treasury is it makes small tokens holders less relevant and possibly less likely to participate in votes (though they can of course still contribute to the forum).
It’s great to see that the seasons based governance has increased the number of tokens participating in governance. However, the fact remains that around 55M out of 236M circulating supply is active. For a token who’s sole purpose is governance, less than 25% of the circulating supply participates in governance.
A potential attacker still needs to swoop up only 56M supply which costs less than 1M USD from the market to to raid a 4M USD treasury. Hence our logic of running this test is still a necessary step to test our theory that active value aligned participants if given more VP will continue to remain active and mitigate the likelihood of future attacks. If successful this strategy can present a viable decentralized alternative to increase active votable supply while mitigating risks from bad actors.
These is no upper limit to how many delegates can qualify. As long as the delegate meets the criteria specified in this proposal and signals an ‘opt-in’ they should be included in the delegate list.
If this proposal passes, we will make a forum post inviting delegates who fulfill the criteria to opt in to this program.
I would be worried if only 55 million tokens were delegated, which would be a danger, but I think there might be quite a lot of delegated tokens on the sidelines.
But, that’s not true. If participation of over 60% across the last three months is a requirement, there is an upper limit of who could possibly qualify at time of proposal.
We should probably disclose this list of potential recipients prior to voting.